Token unlocks are significant events in the cryptocurrency market, releasing previously locked tokens into circulation, typically as part of a vesting schedule to ensure long-term project commitment. However, these events often result in increased volatility and price drops due to a surge in circulating supply. While retail investors may view them as high-stakes situations, venture capitalists approach them strategically using methods like OTC deals to minimize market impact. Understanding these dynamics can provide retail traders with crucial insights into market behavior during token unlock events.
Token unlock events can significantly impact crypto markets, leading to increased volatility as previously restricted tokens enter circulation, which can cause price drops.
For venture capitalists, token unlocks are calculated strategies to exit profitably, using advanced methods like OTC deals and staggered sales to mitigate market impact.
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